Hipolit Gliwic 


THE ECONOMIC SITUATION 
OF POLAND 

TWO LECTURES 

DELIVERED AT THE SCHOOL OF FOREIGN 
SERVICE, GEORGETOWN UNIVERSITY 
WASHINGTON, D. C. 

APRIL I Ith and 18th, 1923 


WASHINGTON, D. C. 
1923 








* 


% 


t,' a '•? *. -v • .f. '•. v . j y-. /,,, . • , ' jj-. > j 1 j /, - % . . -<• , ->. , s L , u *' s> • 'j. r v vi ar y/r . 

„y .-v^v. ; y -f _ v 'z; t iy v --/ > ^\-r ' >•* *£U.y • ^. • j'"'•» ^ A 

' - 

. •*, *■' V- . . V- * J r . . ’ — 


*• . r- 


■31 


✓ 


J 








T 


V 










i«V 


% 


,>fy 








Hipolit Gliwic 


THE ECONOMIC SITUATION 
OF POLAND 

TWO LECTURES 

DELIVERED AT THE SCHOOL OF FOREIGN 
SERVICE, GEORGETOWN UNIVERSITY 
WASHINGTON, D. C. 

APRIL 11th and 18th, 1923 



WASHINGTON, D. C. 
1923 





HC^7 

.?-.Gb 













LECTURE I 


INVENTORY OF POLAND 

It is always a deep satisfaction to speak before a responsive 
audience of young people devoted to science, art or letters. It is 
a great privilege to have the opportunity 
American Audience of sharing this stand with the prominent 
and Polish men by whom it is usually occupied. And 

Lecturer indeed it is a high honor to be admitted 

even temporarily, even occasionally to a 

chair in this University. 

Still, I cannot conceal from you that I accepted the flattering 
invitation not without having hesitated a good deal. 

I did not hesitate because of my bad English pronunciation. 
You are not unaware of the unavoidable shortcomings of the 
speech of a foreigner and—I am perfectly sure—you have forgiven 
me in advance the peculiarity of my accent and all oddities of my 
language. I did not hesitate because of some uneasiness or shyness 
to speak in public. In my younger days I used to address regu¬ 
larly a students’ audience just like yours. 

The source of my hesitation was of a quite different nature, 
as I shall try to show you, detracting your attention for a moment 
from the real subject of my lecture. 

What is the aim of University instruction? • 

Certainly not the futile display of some eloquence. Likewise 
this aim cannot be limited to simply imparting more or less accu¬ 
rate knowledge of facts and things, to explaining phenomena, or 
to communicating data. All that can be easily found in proper 
manuals. 

The real aim of University teaching consists in making of 
one’s listeners one’s disciples, believers in one’s creed, successors of 
one’s ideas, followers of one’s conceptions, collaborators of one’s 
work. Such high standard exacts that the audience maintains full 
trust in the chair. I speak indeed of steady, regular courses and 
have not in mind an occasional lecture like mine. 

But even such occasional lecture requires at least one thing— 
a sympathetic comprehension; otherwise it will fail to implant any¬ 
thing on the auditory and it will therefore become useless. 

Is such an understanding feasible in my case ? Can a Polish 
official reckon on such comprehension, talking before a foreign 
audience about Polish affairs, which, he must admit, are not always 
very rosy, about Polish problems which, he cannot deny, are ex¬ 
ceptionally complicated? That was the question. 

And my answer would certainly be in negative, if that foreign 
audience did not happen to be an American one. You cannot mis¬ 
construe anything I will tell you about Poland, because your an¬ 
cestors had been confronted with troubles analogous to ours, because 


they had to face almost the same hardships, because they had 
been struggling with similar adversities. I can speak freely and 
frankly within these walls even of some vexing problems of our 
actual life, as for example our currency problem, because some 
American analogies come at once to my mind and I am growing 
certain that no American can help thoroughly understanding a 
Pole. 

The United States of America are obviously the spiritual 
leaders of the World; this country today is unquestionably the 
richest nation on the earth; America’s preponderant influence on 
international life is merely a matter of fact. 

Yet, let me recall those momentous days in your early history, 
when John Adams in 1784 was forced to apply to professional 
usurers and Jewish brokers in Holland, from whom after three 
weeks of perplexity and humiliation—I quote your famous his¬ 
torian Fiske—he succeeded in obtaining a loan of a ridiculously 
small amount of $300,000. 

And also allow me to recall the numerous riots, insurrections 
and troubles which occurred in every State after the total collapse 
in 1780 of the inconvertible continental paper currency. And per¬ 
mit me to recall, how many respectable, honorable men on the 
very eve of the XIX century looked upon these United States as 
upon—sit venia verbo—a “Saison-Staat,”—a passing show. 

Forgive me this excursion into your history. One commences 
to believe that, in spite of differences, which divide us, there are 
yet very many common features, very many mutual characteristics, 
which unite us. In the limelight of these historical comparisons, 
the following statement recently made by one of the most promi¬ 
nent American businessmen, acquires quite a deep significance. 
Says Mr. Vauclain; “Poland tpday represents the American ideal 
more than any other nation in Europe.” Such an assertion cannot 
fail to exert a refreshing and regenerating influence. The last 
clouds of my hesitation disappear, and here I am, ready to discuss 
before you our economic policies. 


The Natural Resources 

"Three factors are essential, as you know, to build up an 
economic policy; natural resources, human power, as represented 
by brains and working hands, and capital. * 

What are the natural resources of Poland? Eet us begin first 
of all with the soil. The soil of Poland is chiefly of triple origin. 

In the northeast it resulted from the atmospheric action 
Polish on moraines and other remains of the Scandinavian gla- 
Soil ciers. In the central part we notice a transition from this 
to the result of decomposing process of the local original 
rock. Finally in the southern part it is composed of aerial dust 
carried from the mountains after the disappearance of glaciers, 


4 



making the so-called loess. With regard to its composition the soil 
of Poland may be divided into the following varieties: 

Sandy soil. The quantity of sands stretching everywhere 
strikes the eye of every traveler in Poland. In fact, these sands 
cover two-thirds of our country and they vary greatly in produc¬ 
tiveness, depending on the nature of the subsoil, its permeability or 
its imperviousness, elevation, mean annual temperature, etc. The 
character of sandy soil ranges, therefore, as regards productive¬ 
ness, from the moving sands or dunes on the Baltic Coast to the 
relatively fertile sandy loam in the central part of Poland. 

“Bielica” or whitish soil. This soil resulted from decomposi¬ 
tion of the original rocks carried by Scandinavian glaciers, and ex¬ 
tends in a broad belt through the central and northern parts of 
Poland. This is considered better than the sandy soil, it being 
finer and therefore more absorbent. “Bielica” or whitish soil also 
varies in fertility. The, so-called lake “bielica,” found in Lithuania, 
Pomerania and in the Warsaw district, is considered the best. It 
is more responsive to the influences of air and water than the 
heavier soils, but its fertility also depends on the subsoil. Under 
amelioration it gives good results and is especially suited for truck 
farming and fruit growing. 

Loess or yellow soil is considered very good and is particularly 
good for wheat and sugar beets, but not so good for potatoes and 
fruit. The alluvial soil or muck land, found in small strips along 
the banks of rivers and in valleys in various parts of the country, 
is also very productive. 

Lime soil, the so-called redzina, covers the southwestern part 
of the country, that is, the districts of Lublin, Radom, Kielce, 
Piotrkow and Kalisz, and contains more or less lime, resulting from 
decomposed lime rock. This soil is generally considered good for 
wheat and beets, particularly if it comes from the cretaceous sys¬ 
tem. 

Black soil, possessing a large amount of humus, with a good 
admixture of organic matter, is found in the southeastern part of 
Poland, in the districts of Sandomierz and Wolyn and particularly 
on the borders of the steppes. Its Subsoil consists of loess and also 
black soil. This soil h '‘considered the most fertile of all and is 
famous throughout the world. There is also another kind of 
black soil, but this is chiefly swampy and acid. If it happens to 
have a sandy subsoil, capable of absorbing surplus moisture, then 
it can be used for grain crops. This soil, however, covers chiefly 
wastelands, like the Pinsk Marshes, the drainage of which will be 
one of the great problems of the future.. 

J In respect of soil, therefore, Poland may be divided into three 
strips running from west to east, namely: 1, the northern lake region/ 
extending to the northeast and consisting of “bielica” or whitish 
soil, also of black soil and alluvial lands along rivers and in valleys; 
2, the central belt, the northern part of which consists chiefly of 
sands, black soil and Pinsk Marshes and the southern part of the 


5 


so-called “redzina” or lime soil; 3, the southeastern belt consisting of 
black soil and loess. It is quite characteristic that the agricultural 
population of Poland has for centuries moved eastward in two di¬ 
rections, following chiefly the northern and southern, the more 
fertile strips or the so-called wheat belts. 7 *- 

Out of the total area of 96,404,300 acres, 43,936,200 acres or 
48.5 per cent is arable land, pastures cover 15,627,000 acres or 17.2 
per cent, forests 22,149,700 acres or 24.4 per cent, 
Distribution buildings, water, parks and waste lands cover 8,- 
of Land 988,400 or 9.9 per cent. In order to see how this 

in Poland compares with other countries, I shall give you the 

following figures: 

Percentage Pastures 





of arable 

and 



Country 



land 

meadows 

Forests 

Others 

Argentine . 


. 

. 8.3 

72.0 

19.3 

0.4 

Belgium . 



. 52.3 

20.0 

20.1 

7.6 

Czechoslovakia . 



. 44.7 

18.9 

34.7 

1.7 

Denmark . 



. 69.3 

9.2 

9.1 

11.4 

France . 

_ 


. 44.1 

21.2 

19.8 

14.9 

Holland . 



. 31.9 

41.5 

8.0 

18.6 

Ireland . 



. 18.6 

79.6 

1.7 

0.1 

Jugoslavia . 

. 


. 40.6 

23.2 

19.0 

17.2 

Latvia . .. 



. 28.8 

31.4 

28.3 

11.5 

Germany . 


.. 

.. 48.6 

17.2 

28.7 

5.5 

Russia .. 



_ 25.8 

14.9 

39.7 

19.6 

Roumania . 



_ 51.1 

19.8 

27.5 

1.6 

United States . 



. 33 . 4 . 

20.1 

21.7 

24.8 

Great Britain . 



.. 30.6 

63.5 

5.8 

0.1 

Italy . 


. 

. 51.9 

21.2 

17.7 

9.2 

Poland ... 

__ 


. 48.5 - 

17.2 

24.4 

9.9 


From this table we see that the distribution of land in Poland 
is about the same as in Germany. 

^ Among agricultural products potatoes occupy first place, with 
an annual production before the war of approximately 23,345,000 
tons. The annual production of rye was 5,734,000 
Agricultural tons, oats- 2,813,000 tons, wheat 1,728,000, barley 
Products 1,585,000 tons. In the production of potatoes Po¬ 
land occupies second place in Europe. The pro¬ 
duction of sugar beets amounted to 3,800,000 tons. 

In olden times Poland was known as the land of forests. The 
partitioning powers, however, gave little or no attention to the 
preservation of these forests. As a result of this, the 
Forests forest area gradually diminished under the former Rus¬ 
sian government, in fact, from 30.06 per cent of the 
total area in 1816-20 to 18.05 in 1909. 

The largest forests remaining to this date are situated in the 
northeastern part of the country, covering 32.4 per cent of the total 
area of that district; the famous Bialowiez forest, covering over 
450 square miles, is situated here (Grodno district). 


6 






Considerable forest land is also found in the southern part 
of Poland, along the Carpathian Mountains, reaching at times 50 
per cent and more of the total area of that section. Pine, spruce, 
oak and linden predominate. 

That forest products play an important part in the economic 
life' of Poland is proved by the fact that they represent one-fifth 
of the total value of Polish exports at the present time. 

Below the surface we find the following mineral wealth. 

First of all comes coal . \S 

Deposits of bituminous coal are situated in the so-called Dom- 
browa-Cracow-Silesia Basin, which before the war was 
Mineral artificially divided into three different parts. This basin 
Wealth measures about 2,200 square miles and contains from 95 
to 100 billion tons of coal. It is one of the richest coal 
basins in the world. Its supplies, according to Freeh, a well 
known geologist, exceed those of Great Britain. The Ruhr Valley, 
which has just become so notorious, contains, according to Dr. 
Schulz’s calculations, approximately 54 billion tons; the Saar Val¬ 
ley 14 to 16^ billion tons, France possesses around 19 billion tons, 
Belgium 20 billion, s 

The coal deposits in the Dombrowa-Cracow-Silesia Basin con¬ 
sist of a number of layers, the thickest of which, the famous 
“Reden,” measures from 8 to 16 and in some places even 20 
meters. The total thickness of these coal layers amounts to 300 
meters. The total depth of the deposits is approximately 7,000 
meters. 

The heat value of Polish coal ranges from 5,500 to 6,500 
calories. 

^ It does not coke well, however, but the deeper layers may con¬ 
tain some coking coal on the Polish side too. So far, coking coal 
has been mined on the German side only. 

Coal mining was first begun in Poland in the latter part of 
the 18th century, and developed most rapidly in Silesia. Exploita¬ 
tion of the Cracow Basin was not begun until 1854, with an out¬ 
put of 60,000 tons. Before the war the output of this basin reached 
2 million tons, and the total production of coal in the entire Polish 
territory amounted to approximately 50 million tons. 

Poland also posseses considerable deposits of lignite and peat , 
these, however, are of local importance only. Before the war the 
production of lignite amounted to about 200,000 tons. 

Petroleum. Petroleum was discovered in Poland a long time 
ago. It attracted much attention already in the 18th century, and 
in 1810 we find an arrangement was made to supply Prague, Czecho¬ 
slovakia, with oil for lighting purposes. 

Proper exploitation, however, was not begun until 1853, when 
the first refinery was built by engineers Eukaszewicz and Zeb, 
just one year before Silliman’s experiments in this country. 

^Oil lands extend in a long line along the northern slopes of 
the Carpathian Mountains, commencing in the valley of the River 


Raba—an affluent of the Vistula—and stretching through the towns 
of Gorlice, Jaslo, Krosno, Rogi, Dukla, Sanok, Drohobycz and 
Kolomyja, as far as Bukowina, and continuing through Roumania. ^ 

Poland’s petroleum supplies are estimated by Prof. Szajnocha, 
quite roughly, at 300 million tons, or about 1,300,000,000 barrels. 

Centers of production changed from place to place, as old re¬ 
gions became exhausted, the same as in the United States. Petro¬ 
leum industry was originally centered chiefly in Kolomyja and 
Sloboda Rungarska, later in Schodnica, then in Gorlice, and at 
the present time Boryslaw and Tustanowice produce 80-90 per cent 
of the entire output. 

The quality of Polish oil runs between that of Pennsylvania 
and the Caucasus, containing from 5 to 19 per cent gasoline, 38 
to 60 per cent kerosene, 5 to 13 per cent asphalt and 15 per cent 
lubricants and residues. Its heat value is between 10,500 and 11,000 
calories. 

The total annual production before the war was 1,760,000 tons.. 

It must be taken into consideration that Polish oil fields have 
not yet been thoroughly prospected. On the slopes of the Car¬ 
pathians there are signs of oil in about 300 different places which 
are still intact, and the western part of Little Poland, as well as 
the southern part of the former Kingdom of Poland, has not yet 
been properly surveyed. 

Ozokerite or mineral wax was produced before the war in 
Boryslaw and Truskawiec in quantities of about 2,500 tons annu¬ 
ally, and it is well known on the American market. This is the 
only source of mineral wax in Europe, with the exception of the 
Czeleken Peninsula in the Caspian Sea. 

Salt. Aside from the famous deposits of rock salt in Wie- 
liczka and Bochnia, near Cracow, Little Poland, possesses 500 other 
sources. ■> 

Wieliczka salt mines are among the best known in the world, 
covering an area of about 2 square miles and containing approxi¬ 
mately 21,000,000 tons. ' Exploitation of these salt mines dates as 
far back as the 12th century. They had always been controlled by 
the government and enjoyed the special protection of all the Po¬ 
lish kings. 

This salt is of especially fine quality. It is divided into three 
categories, the highest of which is 98 per cent pure salt. 

The Bochnia salt mines are as old as those in Wieliczka; their 
production, however, amounts to only about one-fourth of that 
of the Wieliczka mines. Before the war the production of the 
Wieliczka mines amounted to 110,000 tons annually. 

In 1870 salt was discovered at Inowroclaw, in the Posen dis¬ 
trict, and the annual production here amounted to 55,000 tons. 

Besides these sources, Poland also has a number of salinas, 
the most important of which is located at Ciechocinek—a well 
known health resort—producing, before the war, 4,000 tons an¬ 
nually. 


8 


Potassium Salts. Kainite and sylvite deposits were discovered 
in Kalusz, easterp Little Poland, in 1854. Exploitation of these val¬ 
uable deposits developed very slowly before the war, the total an¬ 
nual production in 1910 being only 15,000 tons. This production 
is steadily increasing under the independent Polish government. 

Iron ore. Iron ore deposits extend in two strips and occupy 
considerable area. One strip begins near Radom and extends 
along the river Kamienna, past the towns of Konskie and Opoczno, 
southeasterly to Kielce. The other strip runs from Sieradz, through 
the towns of Wielun, Czestochowa, Siewierz, Olkusz, beyond Tar- 
nowiec in Silesia. 

Iron ore is found chiefly near the surface, in lens-like and 
globular concretions, and consists largely of limonites, spherosider- 
ites, brown ore and some hematites. 

These deposits are estimated at approximately 300 million tons, 
but the ore is rather poor, containing only 21 to 37 per cent of 
iron. 

Zinc ore. Zinc ore has long been known in Polish Silesia, and 
it is considered to be among the best in Europe. It contains chiefly 
blends and kalamines and is found near Tarnowiec, at Bytom, 
Siewierz and Olkusz, being about 85 per cent on the Polish side of 
Upper Silesia. The mining of zinc ore was begun in the 18th cen¬ 
tury at Tarnowiec, and was later concentrated near Bytom. In 
1914 it extended to Olkusz. The total annual production of zinc 
ore amounts to 700,000 tons. 

Lead. The Polish lead mining industry is among the oldest 
in Europe. It was begun at Bytom and Szarlej in Silesia in the 
12th and 13th centuries. The annual prewar production was 60,000 
tons. 

Copper. Copper ore is found in small quantities in Mied- 
zianka and Mt. Miedziana near Kielce. Its copper content is very 
small, being but 12 per cent. These mines were worked under the 
Polish government in 1818-1827. Their production, however, never 
exceeded 7,000 tons annually and they are of no economic conse¬ 
quence. 

To complete the mineral resources of Poland I ought to men¬ 
tion amber, which had been found along the Baltic coast since times 
immemorial, in fact, since the Phoenician era. 

Poland is not abundantly provided with water power. How¬ 
ever, the figure given in the World Atlas of Commercial Geology, 
issued by the Geological Survey, namely 200,000 h. p. 
w , is positively too low. Prof. Pomiankowski, of the Lwow 
watei Polytechnic Institute, estimates the water power of South- 
rower ern p 0 j anc i a i 0 ne at 894,000 h. p. If we accept Prof. 

Pomiankowski’s figure for Southern or Little Poland and 
the figure given by the Geological Survey for the rest of Poland, 
the entire water power of Poland will be 999,000 h. p. This is 
but a small portion of the total water power of Europe, which is 
given at 45 million h. p. and that of the world at 439 million h. p. 


9 


So far very little of Poland’s water power has been ex¬ 
ploited—only about 80,000 h. p., whereas the total for Europe is 
8,877,000 and for the world 23,000,000 h. p. 

Mineral Springs of various chemical and therapeutic proper¬ 
ties are found at Rabka, Ciechocinek, Busk, 
Mineral Springs Solec, Druskieniki, Inowroclaw, Szczawnica, 
and Health Iwonicz, Krynica, Truskawiec, Naleczow, etc. 

Resorts Soboty (Zoppot), which has not returned to 

Poland, was a popular seaside resort for War- 
savians. Now Poles flock for rest and sea bathing in ever increasing 
numbers to Gdynia and to the Hel peninsula on the Baltic. 

The most popular health resort in Poland is Zakopane, in the 
Tatra Mountains, not far from Cracow, 2,800 to 3,500 feet above 
sea level, with a mean annual temperature of 40.5 Fahrenheit, or 
4.7 Centigrade. 

The last, though by no means the least, of Poland’s natural 
advantages, is her geographical position between the Black and 
the Baltic Sea on the one hand and between the 
Geographical East and the West on the other—less advantage- 
Position ous from strategic point of view, because of the 

absence of natural boundaries, but quite an asset 
from economic point of view, as it facilitates international rela¬ 
tions. 

Taking into consideration all the natural wealth of Poland, 
we can conclude as follows: 

- The Polish plain, open on all sides, except the southern, where 
it is walled off by the Carpathians, is for the most part agricultural 
and contains mineral products in the south only. 
Conclusion Its soil is not of the best and requires much 
about Natural care and labor. Of mineral products Poland 
Wealth possesses in quantity only those serving as 

of Poland sources of energy—coal and petroleum; she has 

no precious metals, and the other metal ores she 
does possess are rather poor. In other words, profitable exploita¬ 
tion of her mineral deposits requires considerable brains and energy. 
These products should serve to develop Poland’s manufacturing in¬ 
dustry, depending on local supplies of fuel. The dangers of open 
frontiers detract from her otherwise advantageous geographical 
position. 

Mother Nature has not stinted us her gifts, but we must pay 
for them more dearly than other, more fortunate nations. All these 
gifts require a great deal of labor and very strenuous labor at that. 

Under these conditions the second factor mentioned in the 
beginning of this paper, namely, human power, assumes far greater 
importance. 

Human Power K 

Before we go any further we must give a little consideration 
to the physical characteristics of the inhabitants of the country. 


10 


Physical . . The science dealing with the improvement of 

Characteristics race, that is, eugenics, became very fashionable 

of Population of late. 

Japan—se non e vero e ben trovato—gave much consideration 
at one time to the project of increasing the stature of her race. 
Theoretically, this does not seem to present much difficulty, as 
some people claim. However, doubts of an economic nature arose. 
It is true that greater height has its advantages, but taller people 
require more food, more material for their clothes, and, what is 
most important, consume unproductively more of their energy. 
After taking carefully into account all disadvantages resulting from 
the additional amount of cloth, rice consumed, etc., the Japanese 
very wisely gave up what would have proven a very costly experi¬ 
ment. 

Such is the story, but it is really an established fact that peo¬ 
ple of medium height have the greatest capacity for work. There 
are exceptions, of course, but that is the rule. Let us see how this 
rule applies to the Poles. 

The results of anthropometric measurements as regards the 
height of the average Pole are extremely interesting. This average 
height is rather less than medium, being 64.96 inches for men and 
60.36 inches for women. Local factors, not yet definitely deter¬ 
mined, undoubtedly have much to do with the size of the people, 
for the first generation of Poles born in other countries already 
shows higher figures. Thus the average height of Poles of mili¬ 
tary age in this country is 66.18 inches, or 1.22 inches more than 
in Poland. Even in the neighboring countries they grow taller 
than in their own; in the north they approach the tall light-haired 
dolichocephalous Scandinavian type, in the southeast the tall dark¬ 
haired brachycephalous Adriatic type. 

Another interesting physical characteristic of the Poles is their 
high fecundity. The annual increase in population in Poland is 1.7 
per cent and is second only to that in Russia, which is 
The 2.1 per cent. For the period between 1860 and 1921 

Birthrate the increase in population in Australia was 458 per 
cent, in the Untied States 336 per cent (these in¬ 
creases, however, are not natural, having been caused by immigra¬ 
tion). The increase for the same period in the former Russian 
part of Poland was 218 per cent, in Holland 206 per cent, Den¬ 
mark 204 per cent, United Kingdom 185 per cent, Norway 165 
per cent, Germany 156 per cent, Switzerland 153 per cent, Italy 
144 per cent, Sweden 141 per cent and France 107 per cent. 

High fecundity affects labor in two ways. 

The average pater familias, burdened with large family, must 
work more strenuously. Statistics show that Poland has the lowest 
percentage of actual wage earners. This, however, does not mean 
that we are idlers, living on incomes from accumulated fortunes. 
On the contrary, it is because we have to provide for larger fami¬ 
lies. The percentage of wage earners in France is 52.8, which 


proves that the high figure in this instance is due to small families. 
Germany has 45.5 per cent of wage earners, England and Denmark- 
45.2 per cent, Switzerland 44.6 per cent, United States 39.5 per 
cent, Canada 38.0 per cent (the last two figures are the result of 
the exceptional position which woman occupies in the New World, 
even among working classes), finally comes Poland with 33 per 
cent of wage earners. 

The other effect of high fecundity is of greater importance. 

There has long been felt an abundance of working hands in 
the rural districts of Poland. My colleague, Prince Radziwill, who 
occupied this rostrum before me, gave you 
The Occupations certain figures which I am going to repeat, 
of Poland’s The rural population per square kilometer in 

Population Russia is 17, in Germany 31, in Denmark 42, 

France 43, in the former Russian part of 
Poland 65 and in Little Poland 78. It is obvious, therefore, that 
the rural population of Poland is too numerous, and this situation 
becomes rather acute when we consider that 65 per cent of the 
entire population of Poland lives on land, and only 14 per cent is 
employed in industries, 8 per cent in commerce and transportation, 
and the remainder in various professions, etc. Poland ranks third, 
after Bulgaria and Russia, in Europe as a par excellence agricul¬ 
tural country, as the following table indicates: 


Country 



r-Percentage of Population Engaged in—^ 




Agriculture 

Industry 

Commerce 






and 






Transportation 

Bulgaria . 



. 83 

7 

4 

Russia . 



. 75 

10 

5 

Poland . 



. 65 

14 

8 

Denmark . 



. 48 

25 

12 

France . 

. 


. 41 

29 

17 

Canada . 



.:. 37 

29 

18 

Germany . 

. 


. 35 

40 

13 

United States . 



. 35 

32 

17. 

Switzerland . 



. 27 

45 

16 

England . 

. 

. 

. 8 

58 

14 


With the development of industry this surplus rural popula¬ 
tion can be easily absorbed. 

In the former Russian and German parts of Poland there 
was a sufficient supply of men technically trained to manage in¬ 
dustrial establishments, for the gentry and middle classes, being 
excluded from government institutions, were obliged to prepare 
their young generations for technical occupations. In fact, after 
the insurrection of 1863, technical and commercial occupations 
were considered among educated classes as the highest evidence of 
patriotism. 

I am not going to dwell on the ethnical composition of the 
population of our country. This undoubtedly is of great impor¬ 
tance from an economic point of view, owing to the large per- 


12 







centage of Jews (11.6 per cent) congested in cities and towns 
and consisting almost exclusively of petty traders, peddlers and 
small artisans. It is a question, however, which would take us far 
beyond the scope of this paper. 

. As regards density of population, 179 per square mile, a com¬ 
parison with Belgium, 640 per square mile, Germany 376, Italy 
331, Czechoslovakia 250, France 186, United States 
Density of 90, shows that Poland is not overpopulated yet, and 
Population her abnormally large rural population can, as I have 
already mentioned, be easily absorbed by industries. 

Capital 

The third factor essential to the economic development of a 
country is capital. The classical definition of capital reads: an 
aggregation of goods used to promote the production of 
Its other goods, instead of being valuable solely for pur- 

Meaning pose of immediate enjoyment. In connection with a 
nation that means the whole complex of its equipment, 
immovable property, live stock, etc. Such capital arises as a re¬ 
sult of accumulated savings of the given nation or as a consequence 
of borrowing from another nation its savings. In either case it 
constitutes the very well known process of investing savings; it rep¬ 
resents the visible lasting effect of human activities as applied to 
the national resources in order to create, through the progress of 
industry, commerce, agriculture and transportation the so called 
national wealth, it is the condensed and solidified labor. 

The history of the development of industry, agriculture, trans¬ 
portation, tells us how the national wealth has been built up. The 
statistics show its size and importance. 

The industrial movement in Poland dates from the middle of 
the 18th century. The first industrial corporation was formed in 
1765 for the manufacture of cloth. Representa- 
The tives of some of the best families of the country 

Industrial were among its shareholders. The existence of 
Development this corporation was not long, as it was liquidated 
in 1770. The Polish magnates, however, were not 
discouraged by this unsuccessful attempt. Thus the Czartoryskis 
opened up cloth and porcelain factories; Potocki—a tannery; Jezier- 
ski—an iron foundry, and Antoni Tyzenhaus, the most courageous 
and enterprising of all, founded a number of industrial establish¬ 
ments commencing with paper and ending with textile mills. In 
1780 Tyzenhaus stood at the head of no less than 23 different 
enterprises. 

The historical, so called Great Diet of 1788-1792 gave seri¬ 
ous attention to the revival of economic activities in Poland. 

After the partitions, however, each of the three parts of. Po¬ 
land developed economically under entirely different conditions, 
not according to its specific needs, but according to the needs of 
the respective partitioning nation. 


13 


In this way the Posen district and West Prussia served as 
granary from which Germany drew her supplies of foodstuffs. 
Industry remained here in a low stage of development. Of the 
total number of 227,669 persons employed in industries and trades 
in West Prussia and the Posen district in 1907 73 per cent were 
employed in small artisan establishments. 

The mosl important industries in this part of the country were 
sugar and alcohol, employing 38 per cent of all industrial labor. 
Mechanical industry, consisting chiefly of small establishments pro¬ 
ducing for the most part ordinary agricultural implements and 
employing 34 per cent of industrial labor, comes second in im¬ 
portance. Third, ranked the manufacture of fancy goods, which 
can hardly be called an industry in the modern sense of the word. 
In the alimentary industry the most important place was occupied 
by sugar mills, started in 1870. In 1875 there were five sugar 
mills, producing 3000-4000 tons annually. By 1914 this number 
increased to 50, with an annual production of 550,000-600,000 tons. 
Production of alcohol reached approximately 34,342,000 gallons, 
consuming over 10 per cent of the entire potato crop and thus 
forming a valuable outlet for agriculture. Flour mills may be 
included among the more important branches of the alimentary 
industry, also tobacco factories. 

Export statistics present the best evidence of economic life in 
this part of Poland, that is, West Prussia and the Posen district. 
Here it must be noted that Poland was not able to carry separate 
statistics of her foreign trade, forming, as she did, integral parts 
of three different powers. The statistics which I shall give you 
were obtained by tedious and not always close calculations. Ac¬ 
cording to these statistics the then German part of Poland ex¬ 
ported in 1906-1908 about 483,000 tons of cereal grains and flour 
annually, 229,200 tons of which went to Germany. Exports of 
cattle to Germany amounted to 123,000 head, hogs 874,000, horses 
6,600 head. No less than 70 per cent of the total production of 
alcohol also went to Germany. Seventy-five per cent of the total 
production of sugar (450,000 tons annually) went to Germany, 
Holland and England. 

Silesia, acquired by Frederic the Great from Austria as a 
result of the Seven Year War and being violently germanized and 
developed as a purely German province, stands entirely apart. There 
industry flourished in the full sense of the word, employing 60 per 
cent of available labor. 

The annual production of coal increased from 975,000. tons 
in 1850 to 43,800,000 tons in 1913; steel from 227,000 tons in 1880 
to 1,500,000 tons in 1912; zinc, within a period of 25 years, from 
65,700 tons to 168,500 in 1912; lead from 12,700 to 41,300. In 
1913 34,000,000 tons of coal were exported from Silesia, 45 per 
cent of which went to the three different parts of Poland—which 
is a very characteristic feature, 30 per cent to Germany, exclu- 


14 


sivc of Polish provinces, iy 2 per cent to Russia proper, 27 per cent 
to Austria proper, and about y 2 per cent to other countries. 

The most neglected economically was the Austrian part of 
Poland. A thoroughly agricultural country, it was obliged to im¬ 
port twice the amount that it was capable of exporting, and was 
therefore doomed to export her working hands. 

This part of Poland, as we have already seen, possesses great 
mineral wealth. Still her manufacturing industry, with the excep¬ 
tion of the very old textile industry in Bielsk-Biala, dating from 
the Middle Ages, remained completely undeveloped. 

Exports of this part of Poland, called Eittle Poland, con¬ 
sisted in 1912-13 chiefly of the following products: petroleum, as 
might be expected, was the principal article of export, amounting 
to 23 million dollars; salt $1,700,000; other mineral products $1,- 
300,000; forest products $2,730,000; alcohol $3,570,000; miscel¬ 
laneous foodstuffs $2,300,000; textile products $3,150,000, various 
$6,625,000. 

About 300,000 people were employed in industries, whose total 
production was valued at $200,000,000, that is as much as agricul¬ 
tural production. 

Industry was concentrated in Eittle Poland in four places: 
textiles in Bielsk-Biala on the Silesian border; coal in Chrzanow; 
petroleum in Drohobycz in the east; miscellaneous manufacturing 
industry in Rwow, the capital of Eittle Poland. 

Congress Poland (as the Russian part of Poland used to be 
called), was the most industralized part of Poland. 

Prince Rubecki, Minister of Finance of Congress Poland 
(1821-1830), was most active in this field, being instrumental in 
the founding of the Bank of Poland, Rural Credit Bank and nu¬ 
merous industrial enterprises. He gave start to the largest and 
most important branch of the Polish industry, namely, the textile 
industry. Taking advantage of the terrible crisis in the textile 
industry in Western Europe, Prince Rubecki, by offering various 
advantages, managed to settle in Poland around 10,000 foreign 
weavers, chiefly from Saxony and German Silesia. 

After the failure of the insurrection of 1831 Polish industry 
suffered many vicissitudes. It was impossible, however, to de¬ 
stroy it. 

The inclusion of Congress Poland within the Russian customs 
frontier in 1850 gave a temporary stimulus to industries of Con¬ 
gress Poland. 

- From 1870 to 1910 agricultural production increased in value 
from $132,000,000 to $360,000,000, or 176 per cent; industrial pro¬ 
duction, that is, the production of regular industrial establishments, 
increased from $34,000,000 to $456,000,000, or 1241 per cent; the 
production of miscellaneous home industries from $16,000,000 to 
$106,000,000, or by 563 per cent. 

The number of persons employed in industry increased from 
46,397 in 1845 to 400,922 in 1910, and the value of industrial prod- 


15 


ucts during the same period of time increased from $9,000,000 to 
$456,000,000. 

The most important branches of industry were: the textile in¬ 
dustry, concentrated in Lodz, Tomaszow, Sosnowiec, and Bialystok, 
with an annual production valued at $196,000,000; the alimentary 
industry, whose annual production was valued at $82,000,000 (the 
value of sugar alone was $34,000,000), mechanical industry, with 
an annual production amounting to $60,000,000; mining and metal¬ 
lurgical industry with an output amounting to $32,000,000; cloth¬ 
ing industry, $25,000,000; ceramic and chemical industries, with 
an annual production amounting to $16,000,000; animal products 
$15,500,000; paper $13,500,000; forest industry $12,000,000. 

The value of imports and exports fluctuated between $315,- 
000,000 and $320,000,000 each,- showing a rather favorable trade 
balance. Exports to Russia alone amounted to $270,000,000, where¬ 
as imports from Russia amounted to about $156,00,000. Congress 
Poland imported grain, flour and other articles of food, such as 
fruit, fish, tobacco, etc., and exported sugar, alcohol, textile prod¬ 
ucts, iron products, skins and hides, boots and shoes, clothing and 
fancy goods. 

Such has been, in rough outline, the economic development 
of Poland after the partitions and until the beginning of the 
World War, and to give you an idea of the re- 
The National sultant national wealth, I shall mention the pre- 

Wealth war figures as submitted to the League of Na- 

of Poland tions in 1921. 

The arable land of Poland is estimated roughly at... $2,770,000,000 


Forest .;.... 4,840,000,000 

Dwellings and public buildings,.. 2,652,000,000 

Industrial buildings .„... 214,000,000 


Approximate total value of immovable property. $10,476,000,000 

The movable property consists of live stock and mechanical 
equipment. The former is estimated at approximately $671,000,000 
and the latter at $705,000,000, making a grand total of $11,852,- 
000,000. If we add Polish Upper Silesia and the Vilno district, 
then the national wealth of Poland should be taken, conservatively, 
.at twelve billion dollars, or about $450 per capita of population. 

This is about ten times more per capita than the national 
wealth of Russia. At the same time, it is only about one-fifth of 
that of the United States, three and half times less than that of 
France, and three times less than the national wealth of Germany. 
It is also less per capita than the national wealth of such countries 
as Italy, with $620 per capita, Spain about $700, Belgium $760, 
Switzerland $998, Denmark $857. It is about the same as that of 
Norway, which is $428 per capita, and twice as large as that of 
Japan, which is only $214 per capita. 


16 







Conclusion 


To sum up the economic inventory of Poland in a few items 
we can say that: 

1. Poland’s natural assets consist of— 

(a) Advantageous geographical situation, darkened however by 
the constant danger resulting from completely open fron¬ 
tiers. 

(b) Medium fertility of soil, demanding for the most part con¬ 
siderable care and labor. 

(c) Fair amount of forests, permitting steady although careful 
exploitation. 

(d) Lack of precious metals and more valuable metalliferous 
ores, but a fair amount of other mineral products, represent¬ 
ing sources of energy, which can serve for the development 
of manufacturing industry. 

2. As far as human power is concerned, we have stated the follow¬ 
ing points: 

(a) An industrious population of very high fecundity, 

(b) A room for greater population, 

(c) An excessive congestion of agricultural population, 

(d) A surplus of people engaged in petty trade, also in primi¬ 
tive handicrafts. 

3. Finally we have found: 

(a) Decided shortage of domestic capital, clearly seen from the 
low figure representing national wealth per capita, and, 
therefore, an 

(b) obvious need of foreign capital in order that new possibili¬ 
ties of livelihood may be created, thus absorbing the un¬ 
productive population. 

Such is the foundation for the economic policy of independent 
Poland. In my next paper I shall tell you about the principal 
directives of this policy. 


17 


LECTURE II 

THE ECONOMIC POLICIES OF POLAND 


In my previous paper read before you last Wednesday I enume¬ 
rated some essential factors which are indispensable to build up 
any economic policy. I gave you also some 
The Impossibility vague and general idea of what can be called 
of Any National the basis on which the economic life of Poland 
Economic Policy can be successfully developed, I tried to show 

Before the War you the objective foundation for proper man¬ 

agement of affairs of my country, and I suc¬ 
ceeded, I hope, in convincing you that all the constituent elements 
of this foundation are of the most promising kind. 

But, there are many countries which possess much better natural 
opportunities than Poland and have not developed anything worth 
while; there are territories of immense riches which serve only 
selfish purposes of alien invaders and do not even amount to any¬ 
thing in the human community. I prefer not to mention any ex¬ 
ample illustrating my assertion; they are too numerous; history 
has left us too many cases of greed, too many specimens of 
voracious conquerors who, in order to appease their appetites had 
wasted and devastated flourishing countries, irreverent of the past, 
irrespective of the future. 

The greatest natural wealth means nothing, the best resources 
do not amount to anything, if they are not governed by a supreme 
will directed towards their proper exploitation, towards attaining 
higher standards of life for the population, laying down strong 
foundations on which to erect a better and freer commonwealth 
of mankind. This subjective factor, the unbiased free governing 
and directing national will, conscious of its aims and ends, is the 
most necessary, the most essential element of economic policy. You 
can divide a country which constitutes one economic unit, you 
can break its most important natural lines of communication, you 
can cut its artery in three, but you cannot call all that an economic 
policy, because the first thing required and aimed at by an economic 
policy is the welfare of the people it concerns. 

After these few introductory words it would be idle for me 
to point out that from the purely economical stand, apart from 
any other reasons or considerations, the partitions of Poland, the 
annexation of its three parts to three different bodies meant in the 


18 


long run a tremendous waste not only for the Poles but also for 
mankind considered as a whole. Is that not an economic waste to 
import oil for Warsaw from the remotest Baku instead of from 
adjoining Boryslaw? Is it anything else but waste to depend on 
Russian grain, as was the case of Congress Poland, while the 
neighboring Polish district of Posen had to export to Germany its 
surplus crop? 

After my preface you will realize too that the greatest dif¬ 
ficulty which confronts a thickly populated, highly developed and 
rather rich country, consists in an entire lack in the recent past of 
an economic national policy. There were Russian, German and 
Austrian policies, but nothing in the remotest way suggesting even 
a shadow of a Polish policy. So, now the creation of a national 
economic policy is the first and by no means the easiest thing to 
start with. 

What is the inheritance left by the three partitioning powers? 

In the former Russian part of Poland industry attained higher 
stage of development than in the other two. This development, 
however, was neither normal nor sound, for 
The Economic only those branches of industry were allowed to 

Policies of thrive which were not sufficiently developed in 

the Partitioning Russia proper. Poland was obliged to pay high 

Powers in duties on coke, although she had no coke of her 

Respect to own. But this was required to protect the coke 

Their Polish industry of South Russia. She was unable to 

Industries properly exploit her deposits of iron ore, be¬ 

cause exportation by inland routes was pro¬ 
hibited. This again to" protect the ore deposits in South Russia. 
The Lodz textile industry was forced to pay extremely high freight 
rates on coal shipped from the nearby Dombrowa Basin in Poland. 
This in order that it might not be in a position to compete with 
similar industry in Moscow, whose supplies of coal had to be 
shipped from the distant Donetz Basin. It was necessary to im¬ 
port petroleum and petroleum products not from the adjacent Aus¬ 
trian part of Poland, but from Baku, over a distance of thousands 


of miles. 

The largest Polish waterway, the Vistula River, was divided 
among three nations and had two custom frontiers. The Russian 
part was not regulated at all and was navigable for only a short 
distance, and even that with difficulty. 

Large parts of the former Kingdom of Poland were, for Rus¬ 
sian strategic reasons—which, by the way, the World War proved 
entirely futile—deprived of railway communication. 

The municipalities were without any selfgovernment, man¬ 
aged by strange hostile incompetent men. And you can conceive 
easily the state of affairs in all Polish cities. For instance, Lodz, 
the second largest city in Poland had no canalization, was deprived 
of electric light in the streets, as well as of street-car lines, etc. In 
the City Hall office in Bendzin it was impossible for years to put a 


19 


new cover on the writing desk of the mayor, because every appro¬ 
priation had to be applied for in Petersburg. 

Poland was free to develop her industries only so long as she 
represented a better organized economic unit than Russia. And 
this development, instead of serving her own interests, was only 
a temporary adjunct of the Russian industry, and was gradually 
depressed as the Russian industry grew. 

Economically, the other parts of Poland were not better off. 
Austria gave no consideration whatever to the specific economic 
needs of her part of Poland. To protect industry in other parts of 
the Austrian Empire, a high tariff was introduced on iron and steel. 
This precluded the development of manufacturing industry in Little 
Poland, and left her completely at the mercy of Austrian metallur¬ 
gical combinations. The same can be said about oil refineries. Dis¬ 
criminating measures were used to protect the interests of other 
refineries in the Empire, and Little Poland, instead of being al¬ 
lowed to finish her product, was obliged to furnish raw material 
to the Austrian, Hungarian and other refineries. 

The most conspicuous neglect of Polish interests in Austria 
appeared in connection with the building of canals. This question 
dragged for about a hundred years and the Austrian government 
could never find means for the realization of this project, which 
was to connect such important waterways as the Danube, the Oder, 
the Vistula and the Dniestr river systems. Finally, owing to nu¬ 
merous inundations, this question was brought up again in the 
early part of the present century. The Local Diet in Lwow agreed 
to supply considerable means and the working plans were com¬ 
pleted. However, in order to obtain a compromise from other parts 
of the Austrian Empire, a bill was introduced in the Vienna Parlia¬ 
ment projecting at the same time the construction of Alpine rail¬ 
ways. The bill was passed, but only the railways were built, the 
canals remained a project. 

The German part of Poland is essentially an agricultural coun¬ 
try, with very high standards. Everyone knows how the Poles 
had to struggle in this part of Poland to retain their land. The 
fostering of German element here was begun by Frederick the 
Great as early as 1776, only four years after the first partition of 
Poland. German colonies were encouraged to buy land from the 
Poles. One hundred and ten years after, in 1886, a law was promul¬ 
gated, on the strength of which the famous Colonization Commis¬ 
sion was formed. To the year 1913 this Commission received from 
the German government appropriations amounting to $135,000,000. 
Because of the resistance offered by the Polish population, a new 
law was promulgated in 1904. This provided that every Pole 
wishing to erect a dwelling must obtain the sanction of the German 
government. Still another law was passed in 1908 allowing the 
German government to expropriate Poles to the extent of 70,000 
hectares in districts where it was felt necessary to introduce Ger¬ 
man element. 


20 


In issuing these laws however, the German government was 
not quite original; a similar law existed in the eastern part of Po¬ 
land, in the former Russian governments of Volynia, Minsk, Vilno 
and Grodno, forbidding the Poles to purchase land, prohibiting the 
building of Catholic churches. 

The very rich Upper Silesia was doomed to become quite in¬ 
significant, because of the impossibility of any further development. 
The Silesian steel mills were unable to compete with the better 
situated Westphalian plants and depended upon external markets, 
in the first place, upon the Balkans. So, during the Balkan wars 
in 1912-1913, they worked only two or three days weekly. Thus 
the German business men of Silesia were positively right when 
they claimed the imperative necessity for Silesian industry to be 
reunited with Poland, in order to have a natural market. How¬ 
ever, they contemplated an annexation of Poland to Germany or 
Prussia; the supreme justice which directs the destinies of the 
world, fulfilled this reunion in a more equitable way. 

All this indicates quite clearly that it is not enough to possess 
all factors essential to the economic development of a country, such 
as natural resources, skillful and industrious population and even 
some capital. In order that these economic factors may be prop¬ 
erly exploited, that the standard of living and the culture of the 
population may be raised, it is absolutely necessary to allow a coun¬ 
try to manage its own interests as it sees best. Shortly speaking, 
smooth and undisturbed economic development was impossible so 
long as Poland remained dismembered and was not allowed to gov¬ 
ern herself. 

I believe that the foregoing will give you, gentlemen, an idea 
of the problems which confronted the Polish nation at the very 
dawn of its new life. These problems would be 
The Effect considered difficult even under normal conditions, 
of the that is, if it had regained its freedom in time of peace. 

World War But you can better appreciate how difficult they are 
for Poland when you recall that her independence 
was restored to her after a long war, which in the east was fought 
almost exclusively on her territory. The destruction of buildings 
alone exceeded l l / 2 million, million of which were dwellings. 
You can realize how enormous it is when you consider that the total 
number of dwellings in Poland in 1921 amounted to 3,600,000. You 
will have also a remote idea of damage done to the railroads by 
various armies particularly in the eastern provinces where they end¬ 
lessly advanced or retreated, when I tell you that, apart from any 
other demolition, the number of railway bridges destroyed was 
about 7,500. 

After regaining her independence Poland was obliged to fight 
various bloody battles, and her frontiers were not finally settled 
until several weeks ago, that is, March the 14th, by the Council 
of Ambassadors. 


21 


Now only the time seems to be ripe for drawing plans of a wise 
constructive economic policy. 

In face of the data I have given you, the contours of such a 
scheme can be outlined without any difficulty. Poland is—as 
we have seen—and for a long time will remain a 
The General chiefly agricultural country, and the foremost 
Economic economic problem .of* Poland is to raise agricul- 

Problems tural production. The average yield of wheat per 

Confronting acre is 16 bushels. With more intensive cultiva- 
the Polish tion this yield can be raised to equal—all over the 
Nation country—at least that of the former German part 

of Poland, that is, a minimum of 25 bushels per 
acre. This, we hope, will be accomplished when the agrarian re¬ 
form, which has already been passed by the Diet, is effected. 

Speaking of agriculture, however, we should not forget the 
superfluity of our rural population. In order to release the land 
of this surplus and to give them new opportunities it is quite neces¬ 
sary to create new sources of livelihood. These can be found in 
developing the means of communication as well as the manufactur¬ 
ing industry. 

First of all, our attention is attracted by the fact, that Poland’s 
excellent geographical situation was not taken advantage of to its 
full extent. Owing to Poland’s dismemberment by three different 
powers, the shortest route connecting the Baltic and the Black Sea 
remained entirely unused. Only one route was made use of, the 
route from the West to the East of Europe, over which Russia 
transported the greater portion of her European imports. 

At the present time the shortest route between the Baltic and 
the Black Sea lies only over two closely—I am happy emphasizing 
it—associated countries Poland and Roumania. Any economic pol¬ 
icy properly conducted should, therefore, be directed toward the 
development of means of communication between the Baltic, the 
Black Sea and the Near East, with a further outlet in the rich 
Asiatic lands. How important this route is, we can readily appre¬ 
ciate, when we realize that it runs through the most important oil 
fields of that part of the world: Mesopotamia, Persia, Baku, North¬ 
ern Caucasus, Roumania and Poland. As regards the importance 
of means of communication, it is not necessary to speak about this 
before an American audience. Everyone of you, gentlemen, knows 
that the fabulous economic development of the United States dates 
from the moment of extensive building of railroads after the 
Civil War. 

Increased agricultural production, as well as improved means 
of transportation naturally increase consumption of manufactured 
goods, which in turn stimulates industrial production. 

Poland possesses sources of energy in the form of coal and 
petroleum. She does not, however, possess, as I showed you, any 
ve'ry valuable ores, with the exception of some iron ore, of relatively 
low content. In view of this, our economic policy should aim at the 


22 



development of manufacturing industry, that is, the production of 
finished goods, particularly of those used by farmers, to facilitate 
for them the task of raising agricultural production by applying 
better and more modern implements, artificial fertilizers and so on. 

All that stipulates large investments, and having practically 
no capital available of her own, Poland has to apply suitable means 
in order to attract foreign capital. 

In the light of these problems, the paramount feature of the 
whole Polish policy can be only one, namely the most pronounced 
tendency towards peace, the stubborn and decided avoidance of 
everything which can disturb this peace, impregnated at the same 
time with calm but firm and steadfast decision to defend to the 
utmost our present boundaries, our acquired unity, so indispensable 
for our very existence. 

Such is in big lines the scheme of Polish economic policy. 
Such plan, however, exacts for its fulfillment one generation at 
least. For the time being, however, the present generation requires 
some care which cannot be postponed. 

Were the first steps of the resurrected Poland as far as eco¬ 
nomic life is concerned a success or a failure? 

Pet figures speak. 

In the first place, I wish to tell you that the total production 
of coal in the past year reached 35 million tons. This represent 85 

The Recent P er Cent P rewar production. In the Cracow 

p and Dombrowa Basins, which have been in our pos- 

® S session since the latter part of 1918, the production 
already exceeds that before the war. 

The production of petroleum in 1922 amounted to 700,000 
tons, or 5,000,000 barrels. This is only about 63 per cent of the 
prewar production, and is explained by the destruction of equip¬ 
ment during the Russian invasion of that part of the country and 
the exhaustion of old wells. However, the boring of new wells 
is gradually increasing, and in March, 1922, there were 2,435 wells 
as against 2,181 in 1913. Exports of petroleum products are also 
on the increase. 

The mileage of railways in operation not only shows a large 
increase since 1920—from 8,770 to 10,245 miles—but it already 
exceeds the prewar figure—10,069 miles. And in this respect Po¬ 
land stands third on the continent and ahead of such countries as 
Italy, Spain and Sweden, the last two of which are larger in size. 
There is also a considerable (exceeding 100 per cent) increase in 
the amount of freight handled by railways. The number of cars 
loaded daily in 1920 was 5,140, whereas during the month of Au¬ 
gust, 1922, an average of 10,353 cars was loaded daily. The whole 
amount of freight handled by the railroads amounted in 1922 to 
51^2 million tons, that means an increase of 70 per cent against the 
previous year. All foreigners visiting the country are quite sur¬ 
prised at the efficiency of our railways, which maintain schedule 


23 


time. They are also surprised at the splendid equipment of our 
passenger service. 

The principal Polish industry, that is, the textile industry in 
Todz, exceeds now its prewar capacity, running 2,169,000 spindles, 
i. e., 128 per cent of the prewar number (1,687,000 spindles), 41,541 
looms, 105 per cent of the prewar number, and occupying 72,600 
working men, 109 per cent of the prewar number. 

The production of rock salt is almost double that before 
the war, being 110,000 tons for the first half of 1922. 

I do not wish to bore you longer with figures and shall not 
mention the quantities of agricultural production. I shall only tell 
you that in 1918 there were, roughly, 11,000,0D0 acres of unculti¬ 
vated arable land in Poland. In the spring of 1922 this figure was 
reduced to only 864,000 acres, and it has since been reduced almost 
to naught. As a result of this, emergency import of grain has 
not only been entirely discontinued, but we can now hope to ex¬ 
port some. 

What is, however, the most significant: unemployment has 
been almost entirely eliminated in Poland. 

At this moment, however, we are confronted with great dif¬ 
ficulties of a temporary nature, resulting from our former dis¬ 
memberment and the World War. 

The Task These problems are twofold, namely: the va- 

of the riety of laws by which the three different parts of 

Moment Poland were heretofore governed and the actual finan¬ 
cial situation. 

You will easily realize the differences in laws governing the 
three parts of Poland, when I simply tell you that the average 
burden of per capita taxes in Russian Poland was $9.52, in Aus¬ 
trian Poland $24.00, in German Poland $30.93. 

Time itself will bring a cure to this evil through proper legis¬ 
lative activity of our Congress, and, although no miracles can be 
performed by legislation, let us hope that the next generation will 
adjust all differences simply by living together, by rubbing elbows. 

The healing of the financial ills cannot be intrusted exclusively 
to time. Poland inherited three different kinds of currency—the 
Russian ruble, the German mark and the Austrian krone. In addi¬ 
tion to these, Germany, during her occupation of Poland, intro¬ 
duced a new medium of circulation—the so-called Polish mark— 
without any serious guarantee. That which other nations could 
build up during generations, that is, the whole government appa¬ 
ratus, Poland is obliged to create at once. At the same time she 
was obliged to create an army to defend her threatened existence, 
for, as you know, upon her resurrection Poland had no frontiers, 
she had only fronts. It is quite easy to speak about the abolition 
of armies when one is surrounded by peaceful or weak neighbors. 
Poland, unfortunately, is not so situated. And as the war with the 
P)olsheviks proved, she can depend chiefly on her own strength. 


24 


All this required means before it was possible to even think of 
their collection by way of taxes. 

This marks the beginning of paper inflation in Poland. Its 
later history is analogous to the history of inflation of German, 
Austrian and other European currencies. This creates a difficult 
situation, for paper inflation is the most burdensome form of tax¬ 
ation. But this situation is not without, solution. Both the Polish 
government and the Polish people are quite determined to levy and 
collect most drastic taxes. The preliminary budget was voted on 
the gold basis and taxes will be levied accordingly. 

Our currency situation appears paradoxical, for if we figure 
the papers in circulation at the prevailing exchange value, our metal 
reserve and the foreign currencies in our possession nearly cover 
the paper currency in circulation. It is therefore, quite clear that, 
when the proper moment arrives, the withdrawal of the mark and 
the stabilization of new currency can be accomplished without 
great difficulties and without economic upheaval. This all the more 
so since our trade balance commences to be in our favor. 

The last mail brought us some cheerful and encouraging news. 
A new bill was recently introduced in the Diet aiming at the im- 
provement of finances. This new bill proposes the 
T , e t . introduction of the so-called theoretical gold unit, 
lneoieucai qqq s t ^ e ^ rst attempt at the introduction of a 
Gold Unit theoretical unit of currency, based on the so-called 
index-number of 19 basic commodities. 

Somebody would ask perhaps, if this would not be considered 
a risky experiment—this building up of a new currency system on 
such an uncertain and abstract foundation as the index-number, 
instead of erecting it on some strongly stabilized and really exist¬ 
ing foreign monetary unit as, for instance, the American dollar 


or the Swiss franc. 

There are, however, very good reasons for basing the new 
monetary unit preferably on the fictitious and elusive index-num¬ 
ber than on tangible and substantial gold. 

The war and its consequences have proven pretty clearly the 
undeniable instability of purchasing power even of such a strong 
monetary standard as the American dollar. On the other hand, 
the exchange rate of the Polish mark has still little to do with its 
real internal value: this means that you still can have for your 
dollar in Poland, in some instances, three or five or even seven 
times as much as this same dollar will buy here in this country. 
The unprecedented heavy decline of the Polish mark does not 
mean anything else but a hurried escape performed by the owner 
of the depreciated currency from the unsafe—in his panic stricken 
mind at least—monetary unit to some safer one. Such phenomenon 
has been observed and studied recently in the case of the German 
mark. This assertion can be easily confirmed, proven and illus¬ 
trated by the following figures compiled by the U. S. Department 


of Commerce: 


25 


m 

w 

u 

l-H 

a 

ft 

Q 

£ 

< 

ft 

o 

£ 

< 

a 

u 

ft 

•\ 

pH 

U 

£ 

ft 

a 

a 

a 


o 

o 


Ol 

05 


c 

G 

>"5 

l/T 

0) 

02 

TJ 

G 


G 


C/2 

0) 

V 


<5 ft 

W a 


o 

r-H 

oo 

Ol 

b~ 



00 

o 

lO 

o- 

i-H 

05 

05 

00 

05 

o- 

to 

LO 

o 

t"— 

GO 

LO 

Ol 

to 

o 

t- 

00 

LO 


e- 

o 

03 

Ol 

Cl 

Ol 

Tj< 

00 

i-H 

00 

CO 

Ol 

03 

i-H 

03 

LO 

o 

CO 

to 

CO 

Ol 

05 

03 

CO 

CO 

i-H 

CO 

03 

Ol 

CO 

CO 

1—1 

tH 

r-H 

r-H 

l-H 

tH 

i-H 

i-H 

Ol 

Ol 

CO 

CO 

CO 

CO 

CO 

CO 

CO 



LO 

to 

to 

00 

l-H 

LO 

i-H 

i-H 

Ol 

CO 

CO 


to 


LO 


o 

be 

a 

03 

X 

a 

X 

H 


o 

LO l-H 

o 

Ol 

05 

to to 

O Ol 

CO 

to 

i-H O 

o 

o 

CO 05 

CO 05 

i-H 

00 

Tj* 

to 

Ol 

o 

l-H O 


t- oc 

to 

o 

l-H Ol 

Ol 

CO 

05 

O Ol 

r- r- 

05 

lO 

LO 03 

o 

to 

00 t-h 

T* O 

CO 

Ol 

Ol 

t- 

r-H 

LO 

O 

Ol 

00 Ol 

t- 

l-H 

1 -H r-H 

i-H 

i-H 

i-H 

CO CO 

LO to 



Tf LO 

to 

LO 

LO to 

00 l-H 

i-H 

to 

CO 

LO 

rH 

t-H 

lo 

LO 

LO O 

H 














rH 

i-H 

i-H 

Ol 

Ol 





t-H 

Ol 


* r>> 

'G u 
G G 
G 02 

-4-> ft 

C/2 ft 

4-> rj 


o 

o 


C5NNt- 

IN lOt-OO 


to 

to 

i-H 

00 

05 

CO 

l-H 

i-H 


00 

5 

2 

CO 


CO LO 00 

CO 

o 

00 

t- 

05 

Ol 

to 

o 

o 

CO 

t— 

H 

to 

i-H 

^ to 

t- 

00 

o 

TF O 

GO 

o 

COtHt- 

t-H 

r- 

CO 

to 

LO 

rH 

05 

00 

Ol 

Ol 

Ol 

CO 

CO 




T!< 

LO 

lo to 

to 

00 

05 l-H CO 

i-H 

i-H 

Ol 

CO 


LO 

to 

i-H 


Q 

£ 

C 

ft 

O 

ft 


ft 

G 

£ 

02 


C/2 

0) 

X 

<P 

T3 

G 


^ «J 
G g 

■s-g 

« ft 


02 

bo 

G 

G 

X 

02 

X 

H 


be 

>> 


o 

G 

02 


T3 
G 
G 

ft 

5 G 
GO 
O 


Q) 

G C/2 
C/2 Q) 
02 O 

"o'C 

£ g 


LO 

to 

o 

Ol 


r— 

rH CO 

IH 

to 

00 


CO 

to 





LO 

05 

Tt 

LO 

GO 


05 

CO 

CO 

lo 00 

t- 

i-H 

LO 

Ol 

i-H 

LCJ 

to 


o 

LO 

o 

05 


to 

LO 

LO 

LO 

to 

t>- 

C— IH 

00 

o 

co 

LO 

o 

t- 



to 

to 

00 

Ol 

t* 









rH 

rH 

rH 

Ol 

Ol 

CO 

% 




t-H 

Ol 


C/2 


G 

0) 


C/3 

02 

02 


« a 


05 


02 


CO 

00 T-H 

05 

o 

LO 

rH 


to 

t-H 

LO 

Ol 

05 

to 

i-H 

05 05 

i-H 

00 

00 

Ol 

05 

i-H 

t— 

00 

CO 

to 

Ol 

CO 

CO 

to 

in 

f—4 

rH 

LO 

LO 

IH 

o 

05 

to 

05 

H 

05 

00 

tH 

05 

to 

Tt< Ol 

05 

CO 

rH 

00 

LO 

H LO 

rf 

tH 

00 

05 

i-H 

Ol 

l-H 

tH 

G 

CQ 

II 

to 

Ol 

Ol Ol 

Ol 

Ol 

CO 

CO 


LO 

t— 

to 

to 

to 

to 

C'- 

'00 05 

05 

^H 

iH 

CO 

i-H 

tH 

b* 

H 

T^-Ol 

Ol CO 

Ol 

Ol 


to 

t- 

05 

CO 

rH 

Ol 


02 

bO' 


K ft 

H w 


G 

II 

CO 

00 

i> 

to 

to 


05 

Ol 

o 

tH 


LO 

LO 

05 

00 


Ol 

05 

tH 

05 

LO 

to 

Ol 

o 

CO 

LO 

Tj< 

Ol 


00 

o 

05 

G 


to 

00 

05 

05 

iH 

Ol 

05 

CO 

CO 

05 

o 


co 


tH 

t-H 

LO 

o 

Ol 

o 


LO 

05 

o 

00 

HP 

LO 

CO 

LO 

LO 

to 


A 

u 

i-H 

rH 

rH 

rH 

Ol 

CO 


LO 

05 

o 

CO 

tH 

tH 

00 

05 

05 

05 

o 

CO 

00 

GO 

to 


Ol 

tH 

Ol 

to 

00 

GO 

05 

to 

LO 

V 

G 










iH 








rH 

t-H 

tH 

i-H 

Ol 

CO 





i-H 

CO 


T3 

O 

o 

«4H 


4-> 

-A 

bo be w >> 

G Jt; G 

'w X oM 55 ^ 
ci 03 j 3 ft 
O S 02 

-*-> —« rrt ^ a 

r| 

o ^ 


HCWONQOHCOOiCOW 
Tf LO LO 1C LO t- O rH CO CO CO 


O LO H CO O OJ o 
G CD Q CD (M Tt CO 


CO 

LO 

00 

00 


co 


00 

LO 

LO 

00 

CO 

CO 

00 

o 

Tt« 

Ol 

00 

00 



to 

05 

o 

tH 

LO 

LO 

05 


IH 

CO 

rf 

LO 

O; 

CO 

CO 

00 

LO 

00 

Ol 

Ol 

co 


to 




tH 

i-H 

i-H 

Ol 



-m 24 7? 

o gQ 

ESS 

ft 


G 

G 

02 

s 


LO 

O' 

tH 

rH 

IH 

rH 

LO 

CO 

to 


to 

to 

b— 

CO 

t"* 

r- 

LO 

t^ 

i-H 

CO 

LO 

Ol 

05 

Ol 

r— 

o 

LO 

Ol 

00 

05 

Ol 

Ol 

o 

to 

05 

CO 

o 

o 

t'— 

Ol 

00 

to 

o 

CO 

05 

CO 

tH 

05 


LO 

rH 

T* 

to 

CO 


o 

to 

IH 

00 

00 

05 

CO 

o 

Ol 

05 

to 

CO 

rH 

o 

lO 

iH 

00 

05 

Ol 

LO 

LO 

tH 

rH 

05 

to 


o 

tH 

I'— 






H 

Ol 

Ol 

CO 


CO 

CO 

CO 

CO 


CO 

CO 


LO 

tH 

tH 

i-H 

LO 

tH 


tH 

Ol 

CO 






















rH 

rH 

t-H 






tO CO O Tt< 
GOO) C- O 
100050^ 
CO tD 


in 

r | | 

<h O £{ 

G 5 ^ s 

G .2 ^ O £ 

sS1 E ~ 

^ g g: 

« 


COOOG^t^CDOiTfNOOQW 

oioOOOOOOOOO^COt^^OO 
i0 10CDXQOONtI<C0 02H 

t-H rH r-H H tH O) 


CDrtQCDGOCOCDGOOOlOG OQlflCD 

^ CO 00 LO 00 00 t"— O rH o b— O Ci Lft CO 

CO^^LOtOOOrHCOOlOlOlOl CD X Cl Q 

MClClClMClGGTtiOCDh- i—<r-H 


MCDtXN 
• • • • 
ClOt^W 
^ CDC) 
Ol 03 CO tO 



03 52 H T3 .c 

52 M h ^ 4 J 
tH H O CO Tf 


Ol 

Ol 

C5 


C /2 G Jh+j 
rH Ol CO ^ 


26 














































In the fourth quarter of 1922 the outstanding currency’s index 
rose to 1180, the retail prices to 1165 thus showing perfectly their 
interdependence, while in the same time the rate of exchange in¬ 
creased to 2176. You see clearly that the building up of our new 
currency on the exchange would mean nothing else but protecting 
exchange speculators and favoring profiteers. As strange as that 
may sound, the fictitious index-number proves to be the more prac¬ 
tical basis for a new currency. Practically, of course, this index- 
number proposition is identical to the adoption of the prewar pur¬ 
chasing power of gold which at that time could be pretty well con¬ 
sidered as stable, for everyday purposes at least. You have to 
bear in mind also that the adjustment of government employees’ 
salaries and workingmen’s wages has been done, during the last 
few years, on the cost of living basis, i. e., on the index-number 
oscillations, thus introducing the index-number in the everyday life 
of the population and making people much more familiar with this 
fiction than with the reality of yellow metal which for them is also 
undoubtedly a fiction, because, although existing—I admit gladly— 
somewhere on earth, it has .almost entirely evaporated from Eu¬ 
rope since the war. 

It is very characteristic that in these reforms the Polish gov¬ 
ernment is following unknowingly the road pointed out some time 
ago by one of America’s most eminent economists, Prof. Irving 
Fisher, in his splendid work entitled “The Purchasing Power of 
Money,” and again repeated in his most recent work, “The Making 
of Index Numbers.” 

Says Prof. Fisher: 

“But the original purpose of Index-numbers—to measure 
the purchasing power of money—will remain a principal, if 
not the principal, use of index numbers . . . and if, or 

.when we do regulate and stabilize the moneys of the world 
‘ ‘ ‘ it is the Index Number which will be requisitioned 

to measure and guide such regulation.” 

A similar conclusion is reached by one of the best experts on 
the economics of Eastern Europe, Dr. E. Dana Durand, in an 
article which appeared in one of the last issues of “Commerce Re¬ 
ports.” 

As important as this currency experiment may seem, the real 
adjustment of our financial situation lies, as I pointed out, in a 
different sphere; namely, in balancing the budget. 
The Balancing The mentioned new bill also provides for that by 
of the Budget 1926 by means of heavy taxation, strictest econ¬ 
omy, and the exclusion from the budget of all 
items pertaining to such government properties as railways, and 
government monopolies, which are to be converted into separate 
self-supporting corporations. 

This is how the past, the present and the future of Poland 
appear from an economic 1 point of view. I shall not draw any con- 


27 


elusions, as my position as a Pole and official govern- 
The ment representative is rather delicate. "You will, there- 

Prospects fore, allow me, gentlemen, to finish by quoting an 
American who spent several years in Poland, worked 
hard and accomplished a great deal, and who is thoroughly ac¬ 
quainted with the situation there. You will allow me, gentlemen, 
to quote a passage from the final report of Colonel Barber, former 
technical adviser to the Polish Government, whom you will see 
next week on this stand in person: 

“Externally as well as internally Poland has faced many 
difficulties during the past three years. Besides the military 
burdens already noted, she suffered greatly from the many 
unsettled boundaries left by the peace treaties, and the in¬ 
evitable antagonisms due to such questions. These difficul¬ 
ties have, to a greater or less degree, been experienced by 
nearly all the European countries that were engaged on 
either side in the great war, but on none did they bear more 
heavily than on Poland. At times the problems of this 
character which she faced seemed almost impossible of solu¬ 
tion, but gradually, by careful and consistent conduct of 
negotiations, on the one hand quietly insisting on the rights 
of the Polish of the territories concerned, and on the other 
hand avoiding any tendency towards imperialism, these 
troublesome boundary questions have been brought to what 
appears to be permanent and reasonably satisfactory settle¬ 
ment. 

“In the past two or three years, the question has often 
been asked by sympathetic friends of Poland whether the 
Polish people possess the capacity for self-government, or 
whether, - as some of her neighbors would believe, their in¬ 
dependence is destined to be of short duration. In the light 
of their accomplishments during the past three years this 
question can only be answered most favorably to the Poles. 
Placed before a series of complex political and economic 
questions, in an unfavorable environment, they have suc¬ 
ceeded in settling the most difficult questions and have made 
steady progress in the right direction. In regard to the 
future, there is every reason to expect a continuation of the 
same pacific and constructive tendencies.” 


28 










i 














I 


\ 



*wl 


' 








■* 






* $ 






r '•'cVuj 







